The Fed starts its two day meeting today with its policy statement scheduled for 2:15PM ET on Wednesday. There is usually some above average volatility just before and after the Fed announcement. With volume levels running relatively low and option expiration pending, this volatility could be exaggerated. Things usually settle down around 3PM. Seasonality remains bullish overall. First, Rob Hanna of quantifiableedges.blogspot.com notes that December options expiration week is historically an up week. Second, we have the Santa Claus rally, which typically kicks in from December 21st. Third, small-caps historically outperform from mid December until end January. These bullish seasonal patterns enhance the short-term and medium-term uptrends for the overall market (SPY).
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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